CLEC Appeals FCC’s USF Order in 4th Circuit
Core Communications appealed the FCC’s Universal Service Fund and intercarrier compensation order Friday. The USF/ICC appeal is apparently the first legal challenge to the commission’s USF overhaul (CD Oct 28 p1). But it will not be the last, telecom experts have predicted. It was filed in the 4th U.S. Circuit Court of Appeals in Richmond, Va. It’s a mere two pages.
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"The agency’s decision in the FCC Order and FNPRM is arbitrary and capricious, contrary to statute, without substantial record support, a departure from reasoned decision-making, and otherwise unlawful,” the appeal said. In a news release, Core said it was focusing on the move to bill-and-keep pricing under new intercarrier compensation rules. “The FCC’s order undermines the [1996 Telecom] Act by creating a myriad of new transitional rates that are not based on cost, and which eliminate the rate-setting role of state commissions,” Core said in the statement.
"Ultimately, the FCC’s order would nullify the Act’s ICC provisions altogether, by mandating an ICC rate of zero,” the CLEC said. “This result is contrary to the Act and possibly unconstitutional.” The lawsuit was filed by Eckert, Seamans telecom lawyers Charles Zdebski and Jennifer Lattimore. Analysts have said CLECs such as Core fared the worst under the new USF/intercarrier compensation regime rules. An FCC spokesman declined comment on the appeal Friday.
A commission official defended the USF order. All sectors of industry were asked to sacrifice, the official acknowledged. But CLECs asked for -- and got -- symmetrical treatment for VoIP, plus rules on phantom traffic, “a level playing field in the business market” by forbidding ILECs to recover access charges only from residential customers, and an “expectation” in the order that incumbents negotiate IP exchanges in good faith, the official said. “Their concerns were heard and their interests fairly reflected in the order.”